Russian businessman convicted of hack-and-trade allegations in the US

By Nate Raymond

BOSTON (Reuters) – A US jury convicted a wealthy Russian businessman with ties to the Kremlin on allegations that he and others made tens of millions of dollars by hacking US computer networks to obtain classified inside information about several companies with which they did business .

Vladislav Klyushin, the owner of a Moscow-based information technology company called M-13 that has worked for the Russian government, was found guilty Tuesday by a federal jury in Boston of conspiracy, wire fraud and securities fraud after a trial.

“The jury found Mr. Klyushin for exactly what he is — a cybercriminal and a fraudster,” Boston-based U.S. Attorney Rachael Rollins, whose office is prosecuting the case, said in a statement.

“We are disappointed but respect the jury’s verdict,” Klyushin’s lawyer Maksim Nemtsev said in an email, adding that his client would appeal.

Of the five Russian nationals accused of running the nearly $90 million scheme, 42-year-old Klyushin was the only one arrested and brought to justice after being arrested while on a ski trip in Switzerland in March 2021 and extradited to the United States.

The other four remain at large, including Ivan Ermakov, a former Russian military intelligence officer who worked at M-13 and is wanted by the US government for his alleged involvement in hacking schemes to meddle in the 2016 presidential election and anti- attacking doping agencies.

Klyushin’s trial marked a low point in US-Russia relations after Russian President Vladimir Putin’s invasion of Ukraine last year. While the charges were laid before the war, Klyushin’s ties to the Kremlin have long intrigued US authorities.

His lawyers had argued that there was no evidence that he had inside information and was aware of hacking, and his lawyer in Switzerland said the real reason Klyushin was charged was his ties to the Russian government.

That lawyer, Oliver Ciric, said US intelligence officials tried to recruit Klyushin in 2019 and British intelligence did the same a year later.

Prosecutors said Klyushin and his associates made nearly $90 million trading stocks, based on yet-to-be-released information that hackers stole across hundreds of listed companies.

The hackers broke into the networks of two firms that help public companies file reports with US securities regulators, Donnelley Financial Solutions and Toppan Merrill, prosecutors said.

2018-2020 hackers viewed and downloaded undisclosed earnings reports for hundreds of companies, including Tesla Inc and Microsoft Corp, that Klyushin and others traded with before the news broke.

The stolen financial information about these companies allowed Klyushin to turn a $2 million investment into nearly $21 million and the group as a whole from about $9 million into nearly $90 million, prosecutors said.

Nemtsev argued in court that the prosecutor’s case was built on “gaping holes and conclusions” and that the trading was based on news and social media posts that Klyushin’s company monitored to forecast stocks.

(Reporting by Nate Raymond in Boston and Brendan Pierson in New York, editing by Alexia Garamfalvi and Josie Kao)


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